Financial Performance - The company's revenue for the year ended December 31, 2022, was HKD 101,975,265, representing a significant increase from HKD 77,309,614 in 2021, marking a growth of approximately 31.9%[17] - The profit attributable to shareholders for the same period was HKD 7,956,876, up from HKD 6,800,879 in 2021, reflecting a growth of about 16.9%[17] - The company's net profit margin decreased to 7.8% in 2022 from 8.8% in 2021, indicating a decline in profitability despite revenue growth[17] - The earnings per share for the year was HKD 1.58, an increase from HKD 1.35 in 2021, reflecting positive growth in shareholder returns[17] - The company achieved audited revenue of HKD 101.975 billion and operating profit of HKD 12.846 billion for the year, with a net profit attributable to shareholders increasing by 17.0% to HKD 7.957 billion[58] - The company proposed a final dividend of HKD 0.24 per share, totaling an annual dividend of HKD 0.48, representing an 18.5% increase year-on-year[58] - The group achieved significant operational improvements, with a comprehensive enhancement in operating cash flow and development quality[59] - The group maintained a strong financial position with cash on hand of HKD 23.881 billion, accounting for 10.4% of total assets, and a net gearing ratio of 69.4%[64] - The group successfully issued green medium-term notes, marking the first issuance of green bonds certified at the highest level for prefabricated buildings in the country[64] - The group secured HKD 31.69 billion in repurchase funds from construction-related investment projects, a 24.2% increase from HKD 25.51 billion in 2021[77] Project and Contract Activity - The total value of uncompleted contracts as of December 31, 2022, was HKD 294.53 billion, an increase from HKD 281.36 billion in 2021, showing a growth of approximately 4.1%[17] - The company secured 182 new projects during the year, with a total contract value of approximately HKD 160.73 billion[54] - The total contract amount for new projects undertaken in 2022 reached HKD 160.73 billion[109] - As of December 31, 2022, the total value of ongoing contracts amounted to HKD 522.63 billion, with an uncompleted contract value of HKD 294.53 billion[108] - The distribution of ongoing projects shows that 62.7% are in mainland China, 21.2% in Hong Kong, and 10.9% in Macau[108] - The company is actively involved in 14 major construction investment projects across various provinces in mainland China[121] - The company has a total of 348 ongoing projects, with 219 located in mainland China[108] Market and Geographical Insights - The construction segment in Mainland China contributed 47.7% to the overall revenue, while Hong Kong and Macau contributed 36.5% and 10.1%, respectively, highlighting the geographical distribution of revenue sources[19] - Revenue from the Hong Kong division grew by 56.1% to HKD 37.21 billion, while the Macau division's revenue reached a new high of HKD 10.54 billion, up 25.4%[75] - The mainland China revenue increased by 20.0% to HKD 48.63 billion, with segment profit rising 17.1% to HKD 10.28 billion[76] - The company is focusing on expanding its market presence in the Greater Bay Area, leveraging infrastructure investments to drive growth[121] Innovation and Technology - The company held its first information technology conference themed "Smart Construction, Digital Operations" from January 9 to 10, 2022, indicating a focus on innovation and digital transformation[21] - The company launched the HaLong "Modular Integrated Construction (MiC)" series of building products globally on August 15, showcasing three major categories[40] - The company’s technology research on "Key Technologies for High-Durability Seismic Tunnel Construction" was recognized as one of the top ten new technologies in engineering construction for 2022[46] - The group has received 112 patents in the year and continues to strengthen its R&D and promotion of construction technology[66] - The company is investing $10 million in R&D for new technologies aimed at enhancing user experience[5] Sustainability and Social Responsibility - The company was selected as a constituent of the FTSE Social Responsibility Index for six consecutive years, highlighting its commitment to social responsibility[38] - The company has been recognized for its sustainable development efforts, receiving multiple awards and maintaining a presence in the FTSE4Good Index for six consecutive years[62] - The company has received accolades for its volunteer efforts and corporate social responsibility initiatives, emphasizing its commitment to community engagement[135] - The company is committed to promoting sustainable low-carbon construction, aligning with national carbon neutrality goals, and implementing innovative construction technologies to reduce carbon emissions[159] - The company has established an ISO 14001:2015 environmental management system, continuously improving its environmental performance and compliance[156] Employee Development and Community Engagement - The group established a regular training mechanism, with over 4,000 participants in various training programs throughout the year[65] - The company has implemented a "5+3+X" youth talent development system, aiming to recruit at least 1,000 new employees annually in Hong Kong, including at least 100 graduates and 100 interns[146] - The company awarded scholarships to 65 children of employees, with amounts ranging from HKD 3,000 to 10,000, to recognize academic and non-academic achievements[154] - The "3311 Volunteer Association" has over 2,100 volunteers and participated in over 15,000 hours of community service in 2022[167] - The group actively engaged in various community volunteer activities, including home repairs and environmental initiatives, to address community needs[169] Corporate Governance and Investor Relations - The management team emphasizes the importance of investor relations, viewing it as a key focus area to enhance corporate governance and value creation, achieving good results in 2022[172] - The group received recognition for its corporate governance and stakeholder engagement, winning multiple awards including "Best Managed Company" in the industrial sector by Institutional Investor in 2022[174] - The company is committed to transparency and proactive communication, ensuring that investors are well-informed about its development strategies and operational conditions[173] - The management team is focused on listening to investor feedback and incorporating it into the group's strategic planning, highlighting the importance of stakeholder input in decision-making[172] Leadership and Management - The company has a strong leadership team with extensive experience in construction and real estate, including over 33 years in the industry for Mr. Yan, the chairman[186] - The CEO, Mr. Wang, has over 18 years of experience in investment and construction management, indicating strong operational leadership[188] - The board includes independent directors with significant expertise in engineering, law, and finance, enhancing governance and strategic direction[192][195][197] - The company is focused on sustainable development, with a dedicated committee to oversee initiatives in this area[189]

Financial Performance - The group's unaudited revenue for the three months ended March 31, 2023, was approximately HKD 21,639,304,000, representing an increase from HKD 17,325,929,000 for the same period in 2022, which is a growth of about 25.5%[4] - The unaudited operating profit for the same period was approximately HKD 3,398,564,000, compared to HKD 2,904,704,000 in 2022, indicating an increase of around 16.9%[4] Contractual Developments - The total new contracts signed by the group for the three months ended March 31, 2023, amounted to approximately HKD 47.23 billion[5] - As of March 31, 2023, the group's uncompleted contract value was approximately HKD 318.46 billion[5] - Major new contracts included the Kowloon Mother Hospital reconstruction project with a contract value of approximately HKD 3.58 billion, and the Guangzhou Longgui Ceramics City resettlement project valued at approximately HKD 5.23 billion[6]

Financial Performance - The company's revenue for the year ended December 31, 2022, was HKD 101,975,265, representing a 31.9% increase from HKD 77,309,614 in 2021[2] - The net profit attributable to shareholders for the year was HKD 7,956,876, an increase of 17.0% compared to HKD 6,800,879 in the previous year[3] - Basic earnings per share rose to HKD 1.58, up 17.0% from HKD 1.35 in 2021[4] - Total comprehensive income for the year was HKD 3,846,014, down from HKD 9,963,240 in 2021, indicating a significant decrease[5] - The company reported a pre-tax profit of HKD 10,778,685, which is an increase from HKD 9,385,178 in 2021[18] - The net income tax expense for the year was HKD 2,309,221, compared to HKD 1,949,294 in the previous year, reflecting an increase of 18.5%[19] - The company's profit attributable to shareholders for 2022 was HKD 7,956,876,000, an increase from HKD 6,800,879,000 in 2021, representing a growth of approximately 16.9%[22] - The total dividend declared for the year was HKD 2,241,739,000, up from HKD 1,964,670,000 in 2021, reflecting an increase of about 14.1%[21] Revenue Breakdown - Revenue from construction contracts amounted to HKD 45,219,645, up 40.7% from HKD 32,121,267 in the previous year[12] - Revenue from construction-related investment projects was HKD 49,243,336, an increase of 24.7% from HKD 39,511,725 in 2021[12] - Revenue from the Hong Kong division increased by 56.1% to HKD 37.214 billion, while the Macau division's revenue rose by 25.4% to HKD 10.542 billion[41] - Revenue from mainland China grew by 20.0% to HKD 48.631 billion, with segment profit increasing by 17.1% to HKD 10.284 billion[42] Assets and Liabilities - The company's total assets as of December 31, 2022, amounted to HKD 128,180,363, an increase from HKD 113,956,903 in the previous year[6] - The company's cash and cash equivalents stood at HKD 23,881,499, slightly down from HKD 24,407,419 in the previous year[6] - The company reported a decrease in non-current assets, totaling HKD 100,669,766, down from HKD 105,327,522 in 2021[6] - The total current liabilities decreased from HKD 102,824,642 thousand in 2021 to HKD 102,824,642 thousand in 2022, reflecting a slight improvement in financial health[7] - Trade payables and other payables increased significantly from HKD 60,561,364 thousand in 2021 to HKD 69,736,719 thousand in 2022, indicating higher operational costs[7] - Bank borrowings rose from HKD 10,104,945 thousand in 2021 to HKD 13,719,657 thousand in 2022, suggesting increased leverage for financing operations[7] - The company's equity attributable to shareholders increased from HKD 56,446,165 thousand in 2021 to HKD 57,790,161 thousand in 2022, showing growth in shareholder value[7] - Non-current liabilities decreased from HKD 58,454,706 thousand in 2021 to HKD 58,229,033 thousand in 2022, indicating a reduction in long-term financial obligations[7] Dividends - The board proposed a final dividend of HKD 0.48 per share, totaling HKD 24 million, alongside an interim dividend of HKD 0.24 per share[2] - The proposed final dividend for 2022 is HKD 1,209,028,000, which is an increase from HKD 1,032,711,000 in 2021, reflecting a growth of about 16.9%[21] - The proposed final dividend is HKD 0.24 per share, with a total dividend for the year of HKD 0.48 per share, an increase of 18.5% compared to the previous year[40] Contracts and Market Presence - New contracts signed in mainland China amounted to HKD 91.928 billion, representing a year-on-year growth of 13.3%[32] - In the Hong Kong market, new contracts signed reached HKD 44.896 billion, a year-on-year increase of 24.8%[33] - The company achieved a record contract amount of HKD 22.40 billion for the Macau Galaxy Resort and Casino Phase IV project, marking the largest single building facade contract globally[34] - The new signed contracts for the year totaled approximately HKD 160.726 billion, with a total contract backlog of HKD 522.633 billion as of December 31, 2022[48] Strategic Initiatives - The company plans to continue expanding its market presence and investing in new construction-related projects to drive future growth[14] - The company focused on optimizing its investment business model, eliminating long-cycle projects and concentrating on regions with strong economic growth potential[32] - The company aims to enhance the proportion of new contracts driven by technology in the construction sector, leveraging national industrial policies and market changes[51] - The company continues to focus on high-quality markets such as the Yangtze River Delta and the Greater Bay Area for infrastructure investment projects[42] Sustainability and Innovation - The company successfully completed its first carbon-neutral construction project, the Hong Kong Organic Resource Recovery Centre Phase 2, showcasing its commitment to sustainable development[35] - The company issued green medium-term notes for the first time, marking a significant step in utilizing green finance tools[37] - The company received 112 patents during the year, highlighting its commitment to technological innovation[39] Financial Management - The company maintained a strong financial position with cash on hand of HKD 23.881 billion, accounting for 10.4% of total assets, and a net gearing ratio of 69.4%[37] - The company achieved a net cash inflow from operating activities of HKD 212 million, a significant improvement from a net outflow of HKD 551 million in the previous year[47] Governance and Compliance - The company has adopted and complied with all corporate governance codes as per the Hong Kong Stock Exchange listing rules[56] - The company established a risk management framework to enhance internal controls and compliance awareness across its operations[36] Economic Outlook - The company is optimistic about the economic recovery in China, viewing it as a stabilizer and growth engine for the global economy[51] - The Hong Kong market is expected to benefit from post-pandemic economic recovery, with government initiatives accelerating land supply and public housing construction[51] - Macau's economy is recovering, with new business opportunities emerging as border crossings normalize and central government support continues[51]

Financial Performance - For the nine months ended September 30, 2022, the group's unaudited revenue was approximately HKD 73,411,573,000, compared to HKD 52,835,893,000 for the same period in 2021, representing an increase of 39%[2] - The group's unaudited operating profit for the same period was approximately HKD 9,828,671,000, up from HKD 8,371,570,000 in 2021, reflecting a growth of 17.4%[2] Contractual Developments - The total new contracts signed by the group for the nine months ended September 30, 2022, amounted to approximately HKD 125.74 billion[3] - As of September 30, 2022, the group's uncompleted contract value was approximately HKD 299.18 billion[3] - Major new contracts in Q3 2022 included a project connecting Hong Kong port and airport with a contract value of approximately HKD 1.07 billion, a housing project in Wenzhou valued at approximately HKD 2.34 billion, and a housing project in Fuzhou valued at approximately HKD 1.6 billion[4]

Company Overview [Company Business Structure](index=5&type=section&id=Company%20Business%20Structure) The Group's business is segmented into Mainland China, Hong Kong, Macau, and other regions, encompassing infrastructure investment, construction, and asset operation, with specialized services like curtain wall systems provided by a listed subsidiary - The Group's business layout is clear, with core markets in Mainland China, Hong Kong, and Macau, covering the entire chain of construction, infrastructure investment, and operation, and expanding into specialized areas (e.g., curtain wall systems) [9](index=9&type=chunk) [Board of Directors and Committees](index=6&type=section&id=Board%20of%20Directors%20and%20Committees) The Board of Directors, led by Chairman Mr. Yan Jianguo, includes executive, non-executive, and independent non-executive directors, supported by four specialized committees to ensure governance independence - The Board has established four committees: Audit, Remuneration, Nomination, and Sustainable Development, chaired by Mr. Li Shing Che, Mr. Li Minqiao, and Mr. Zhou Hancheng respectively, reflecting a clear division of responsibilities and a focus on sustainable governance [14](index=14&type=chunk) [Company Information](index=7&type=section&id=Company%20Information) China State Construction International Holdings Limited (03311.HK) is a Cayman Islands-registered company listed on the Hong Kong Stock Exchange, with its head office in Hong Kong and audited by Ernst & Young - Key company information includes stock code **03311**, listed on the Hong Kong Stock Exchange, with disclosure of critical financial dates such as interim and annual results announcement and dividend payment schedules [19](index=19&type=chunk)[20](index=20&type=chunk) [Financial Highlights](index=9&type=section&id=Financial%20Highlights) The Group achieved significant growth in 2021, with turnover up 23.8% to HKD 77.31 billion and profit attributable to shareholders up 13.1% to HKD 6.80 billion, supported by strong uncompleted contract value Five-Year Financial Summary (As of December 31) | Indicator | 2017 | 2018 | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Turnover (HKD thousands)** | 50,152,524 | 55,626,304 | 61,669,678 | 62,458,009 | 77,309,614 | | **Profit Attributable to Shareholders (HKD thousands)** | 5,490,091 | 4,500,148 | 5,413,208 | 6,015,368 | 6,800,879 | | **Earnings Per Share (HK cents)** | 118.85 | 89.13 | 107.21 | 119.14 | 134.94 | | **Dividend Per Share (HK cents)** | 35.00 | 27.00 | 32.00 | 36.00 | 40.50 | | **Net Assets Per Share (HKD)** | 7.62 | 8.53 | 10.08 | 11.54 | 13.14 | | **Uncompleted Contract Value (HKD billions)** | 188.01 | 236.56 | 227.07 | 252.37 | 281.36 | [Annual Milestones](index=10&type=section&id=Annual%20Milestones) 2021 was a productive year for the Group, marked by major project completions, significant contract wins in Hong Kong and Macau, successful financing activities in Mainland China, and numerous awards for innovation, sustainability, and governance - January-February: Completed and handed over the Central Government-aided North Lantau Hospital Hong Kong Infection Control Centre, and secured the highest-value wholly-owned Macau engineering project in the company's history [28](index=28&type=chunk) - May-June: Multiple subsidiaries successfully registered in Qianhai, Shenzhen, expanding Greater Bay Area business; awarded five accolades by Institutional Investor, including 'Most Honored Company' and 'Best ESG Company' [30](index=30&type=chunk)[34](index=34&type=chunk) - August-September: S&P upgraded the Group's rating outlook to 'Stable'; successfully issued the first engineering receivables ABS; China State Construction Hong Kong awarded the 'Hong Kong Star Brand Enterprise Award' [39](index=39&type=chunk)[42](index=42&type=chunk) - November-December: Hong Kong Organic Resources Recovery Centre Phase 2 project committed to construction phase carbon neutrality; the Group became the first TCFD supporter in China's construction industry; awarded the NCE Tunnelling Awards and '2021 Touching Hong Kong Organization' honor [47](index=47&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) Operations and Financial Review [Chairman's Report](index=22&type=section&id=Chairman%27s%20Report) Chairman Mr. Yan Jianguo's report highlights the Group's robust growth in 2021, driven by strong new contract growth across Mainland China, Hong Kong, Macau, and the curtain wall market, while outlining strategies in sustainability, risk, finance, human resources, and technology 2021 Key Performance Indicators | Indicator | Amount | YoY Change | | :--- | :--- | :--- | | **Revenue** | HKD 77.31 billion | - | | **Operating Profit** | HKD 11.24 billion | - | | **Profit Attributable to Shareholders** | HKD 6.80 billion | +13.1% | | **Basic Earnings Per Share** | 134.94 HK cents | - | | **Full-Year Dividend** | 40.5 HK cents | +12.5% | - In 2021, the Group undertook **167 new projects**, with attributable contract value reaching **HKD 140.05 billion**, laying a solid foundation for future revenue growth [55](index=55&type=chunk) 2021 New Contract Value by Market | Market | New Contract Value (HKD) | YoY Growth | | :--- | :--- | :--- | | **Mainland China** | HKD 81.15 billion | +23.7% | | **Hong Kong** | HKD 36.05 billion | +33.0% | | **Macau** | HKD 14.64 billion | +10.2% | | **China State Construction International Holdings** | HKD 8.21 billion | +60.4% | - Looking ahead, the Group will steadfastly implement its 'Technology+' strategy, adhere to a differentiated competitive approach, and seize development opportunities in Hong Kong's Northern Metropolis, major livelihood projects in Macau, and the deep integration of the Greater Bay Area [69](index=69&type=chunk)[70](index=70&type=chunk) [Business Review](index=24&type=section&id=Chairman%27s%20Report-Business%20Review) [Sustainable Development Management](index=25&type=section&id=Chairman%27s%20Report-Sustainable%20Development%20Management) [Risk Management](index=26&type=section&id=Chairman%27s%20Report-Risk%20Management) [Financial Management](index=26&type=section&id=Chairman%27s%20Report-Financial%20Management) [Human Resources](index=26&type=section&id=Chairman%27s%20Report-Human%20Resources) [Technological Innovation](index=26&type=section&id=Chairman%27s%20Report-Technological%20Innovation) [Business Outlook](index=28&type=section&id=Chairman%27s%20Report-Business%20Outlook) [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) Management's analysis highlights a 23.8% turnover increase to HKD 77.31 billion, driven by strong orders, with notable growth in Macau, while financial optimization and business transformation significantly improved operating cash flow, resulting in a 69.4% net gearing ratio 2021 Overall Performance | Indicator | Amount | YoY Growth | | :--- | :--- | :--- | | **Turnover** | HKD 77.31 billion | +23.8% | | **Basic Earnings Per Share** | 134.94 HK cents | +13.3% | | **Total Annual Dividend** | 40.5 HK cents | +12.5% | 2021 Segment Performance | Market Segment | Turnover (HKD billions) | YoY Growth | Segment Results (HKD billions) | YoY Growth | | :--- | :--- | :--- | :--- | :--- | | **Hong Kong** | 23.844 | +6.4% | 0.850 | -14.2% | | **Macau** | 8.405 | +86.6% | 0.832 | +63.3% | | **Mainland China** | 40.529 | +25.3% | 8.784 | +35.1% | - Cash recovery from Mainland China construction-related investment projects intensified, with **HKD 25.508 billion** in repurchase payments received during the year, a **38.8% year-on-year increase** [76](index=76&type=chunk) - Operating cash flow significantly improved, with net cash used in operating activities decreasing substantially from **HKD 4.532 billion** in the prior year to **HKD 0.551 billion** during the year [88](index=88&type=chunk) Financial Position as of End 2021 | Indicator | December 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Shareholders' Equity** | HKD 66.216 billion | HKD 58.280 billion | | **Bank Balances and Cash** | HKD 24.407 billion | HKD 22.455 billion | | **Total Borrowings** | HKD 70.335 billion | HKD 54.375 billion | | **Net Gearing Ratio** | 69.4% | 54.8% | | **Unutilized Bank Facilities** | HKD 82.107 billion | - | [Overall Performance](index=31&type=section&id=MD%26A-Overall%20Performance) [Segment Performance](index=32&type=section&id=MD%26A-Segment%20Performance) [Corporate Finance](index=33&type=section&id=MD%26A-Corporate%20Finance) [Financial Risk Management Policies](index=35&type=section&id=MD%26A-Financial%20Risk%20Management%20Policies) [Business Review](index=36&type=section&id=Business%20Review) As of end-2021, the Group's business expanded with 376 projects under construction, total attributable contract value of HKD 476.66 billion, and uncompleted contract value of HKD 281.36 billion, driven by 167 new projects, primarily in Mainland China 2021 New Projects Awarded Overview | Item | Quantity | Attributable Contract Value | | :--- | :--- | :--- | | **New Projects Awarded** | 167 projects | HKD 140.05 billion | Projects Under Construction as of End 2021 | Market Distribution | Number of Projects | Attributable Contract Value (HKD millions) | Uncompleted Contract Value (HKD millions) | | :--- | :--- | :--- | :--- | | **Mainland China** | 196 | 294,224 | 185,449 | | **Hong Kong** | 154 | 110,981 | 60,728 | | **Macau** | 26 | 52,741 | 24,334 | | **China State Construction International Holdings Group** | — | 18,716 | 10,849 | | **Total** | **376** | **476,662** | **281,360** | - New contracts by market distribution show Mainland China accounting for **57.9%**, Hong Kong **25.7%**, and Macau **10.5%**, indicating Mainland China remains the primary growth engine while Hong Kong and Macau markets remain stable [96](index=96&type=chunk) [Major Completed Projects](index=38&type=section&id=Business%20Review-Major%20Completed%20Projects) [New Projects Awarded](index=39&type=section&id=Business%20Review-New%20Projects%20Awarded) [Projects Under Construction](index=41&type=section&id=Business%20Review-Projects%20Under%20Construction) Corporate Governance and Social Responsibility [Major Honors and Awards](index=50&type=section&id=Major%20Honors%20and%20Awards) In 2021, the Group received numerous awards across comprehensive strength, corporate governance, brand building, public welfare, and safety and environmental protection, reflecting high industry and social recognition - Corporate Governance and Brand Awards: Ranked **first** as 'Most Honored Company' and 'Best ESG Company' in the Industrials Small & Mid-Cap category by Institutional Investor, and included in the FTSE4Good Index Series for **five consecutive years** [130](index=130&type=chunk) - Public Welfare Awards: Received the **9th Hong Kong Outstanding Volunteer Award – Corporate Award**, demonstrating the company's outstanding contributions to corporate social responsibility [131](index=131&type=chunk) - Engineering and Technology Awards: The Guizhou Zhengxi Expressway Extra-Long Tunnel Group Project received the **2021 NCE Tunnelling Awards**, showcasing the Group's technical prowess in complex engineering fields [133](index=133&type=chunk) - Safety and Environmental Awards: Awarded the 'Low-Carbon Care Environmental, Social and Governance (ESG) Label' for **6 consecutive years**, and achieved the highest rating (LEVEL 4) for **4 consecutive years**, demonstrating the company's long-term commitment and practice in sustainable development [134](index=134&type=chunk) [Corporate Citizenship](index=52&type=section&id=Corporate%20Citizenship) Adhering to its mission, the Group actively fulfills corporate citizenship through employee development programs, ISO14001 environmental management, low-carbon construction, extensive social welfare activities, and effective investor relations, earning multiple awards - Employee Development: Launched the 'Double Hundred' Youth Development Program, committing to provide at least **100 graduate employment positions** and **100 internship opportunities** annually, and dispatching Hong Kong employees to participate in Greater Bay Area construction [138](index=138&type=chunk)[141](index=141&type=chunk) - Environmental Protection: Promoted low-carbon construction technologies such as Modular Integrated Construction (MiC) and Design for Manufacture and Assembly (DfMA), and piloted construction phase carbon neutrality with the Organic Resources Recovery Centre Phase 2 project [147](index=147&type=chunk) - Social Welfare: In 2021, volunteer participation exceeded **2,800 person-times**, with over **11,000 service hours**, and the flagship 'Thousands of Homes Renovation' project completed over **480 households** during the year [150](index=150&type=chunk)[152](index=152&type=chunk) - Investor Relations: Met with over **200 investors** during the year, with a significant increase in Stock Connect shareholding, and received multiple awards including 'Most Honored Company' from Institutional Investor and 'Best IR Hong Kong Stock Company' from New Fortune [163](index=163&type=chunk)[164](index=164&type=chunk) [Employee Development and Personal Growth](index=54&type=section&id=Corporate%20Citizenship-Employee%20Development%20and%20Personal%20Growth) [Environmental Policy](index=55&type=section&id=Corporate%20Citizenship-Environmental%20Policy) [Social Welfare](index=58&type=section&id=Corporate%20Citizenship-Social%20Welfare) [Investor Relations](index=61&type=section&id=Corporate%20Citizenship-Investor%20Relations) [Board of Directors and Executive Structure](index=64&type=section&id=Board%20of%20Directors%20and%20Executive%20Structure) This section details the backgrounds and qualifications of the company's Board of Directors and senior management, comprising experienced professionals across various fields, providing strong support for the Group's strategic execution and daily operations - Chairman and Non-Executive Director Mr. Yan Jianguo possesses approximately **32 years** of experience in investment management for construction and real estate enterprises, also serving as Chairman of China Overseas Land & Investment (0688.HK) [171](index=171&type=chunk) - Executive Director and CEO Mr. Zhang Haipeng joined China State Construction Group in 2000, bringing over **22 years** of experience in construction project management [173](index=173&type=chunk) - The independent non-executive director team comprises Mr. Li Minqiao, Dr. Leung Hoi Ming, Mr. Li Shing Che, and Ms. Wong Wai Ching, all senior professionals in their respective fields, providing independent judgment and professional advice to the Board [174](index=174&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) [Corporate Governance Report](index=72&type=section&id=Corporate%20Governance%20Report) This report outlines the company's 2021 compliance with the Hong Kong Stock Exchange's Corporate Governance Code, detailing the Board's composition, committee operations, risk management, internal controls, and shareholder communication to ensure high governance standards - The company complied with **all code provisions** of the Corporate Governance Code during the reporting period [188](index=188&type=chunk) - The Board of Directors comprises **nine directors**, including **four independent non-executive directors**, meeting listing rule requirements, with the roles of Chairman and CEO held by different individuals to ensure checks and balances [189](index=189&type=chunk)[197](index=197&type=chunk) - The Board is responsible for the Group's risk management and internal control systems, having conducted an annual review and confirmed their effectiveness and adequacy [212](index=212&type=chunk) - The company adopted a shareholder communication policy, engaging with shareholders through various channels such as general meetings, annual reports, announcements, and the company website, safeguarding shareholder rights [218](index=218&type=chunk) [Directors' Report](index=83&type=section&id=Directors%27%20Report) The Directors' Report reviews the Group's 2021 business, financial performance, and governance, recommending a final dividend of 20.5 HK cents per share, disclosing key risks and management measures, and covering statutory information like share repurchases and major shareholder holdings - The Board recommended a final dividend of **20.5 HK cents per share**, bringing the total annual dividend, including interim dividend, to **40.5 HK cents** [222](index=222&type=chunk) - During the year, the company repurchased a total of **11,540,000 ordinary shares** on the Stock Exchange for a total consideration of approximately **HKD 54.72 million**, all of which have been cancelled [234](index=234&type=chunk) - The Group issued **USD 500 million** in subordinated guaranteed perpetual capital securities and a total of **RMB 2.5 billion** in medium-term notes in Mainland China to optimize debt structure and supplement working capital [236](index=236&type=chunk)[237](index=237&type=chunk) - As of December 31, 2021, controlling shareholder China Overseas Holdings Limited (COHL) held approximately **64.81%** of the company's shares [249](index=249&type=chunk) [Connected Transactions](index=94&type=section&id=Connected%20Transactions) This section details the Group's significant and continuing connected transactions in 2021, including joint ventures, factoring arrangements, and various sub-contracting and financial service agreements with related parties, confirming compliance with listing rules - Formed a joint venture with China Overseas Land & Investment to jointly develop a Zhuhai project, with a total capital commitment of approximately **RMB 11.4 billion**, of which the company holds a **20% equity interest** [259](index=259&type=chunk) - Signed sub-contracting agreements with China State Construction Engineering Corporation, with the total contract value awarded by the Group to China State Construction Engineering Corporation in 2021 being **RMB 9.803 billion**, below the annual cap of **RMB 55 billion** [264](index=264&type=chunk) - Signed general contracting agreements with China Overseas Land & Investment Group, with the total contract value awarded in 2021 being **HKD 7.366 billion**, below the revised annual cap of **HKD 20 billion** [280](index=280&type=chunk) - Entered into financial services agreements with China State Construction Finance, with the maximum daily deposit balance placed with China State Construction Finance in 2021 being **RMB 0.806 billion**, not exceeding the annual cap of **RMB 1.2 billion** [275](index=275&type=chunk) Financial Statements and Notes [Independent Auditor's Report](index=107&type=section&id=Independent%20Auditor%27s%20Report) Auditor Ernst & Young issued an unmodified opinion on the Group's 2021 consolidated financial statements, highlighting key audit matters such as revenue recognition, impairment assessment of receivables and contract assets, and impairment assessment of concession rights - Auditor Ernst & Young issued an **unmodified audit opinion** [287](index=287&type=chunk) - Key audit matters include: - **Revenue recognition for construction contracts**: Involves significant judgments and estimates regarding total project revenue and costs - **Impairment assessment of trade and other receivables and contract assets**: These assets constitute approximately **51%** of total assets, and their recoverability assessment involves significant judgment - **Impairment assessment of concession rights**: The assessment of recoverable amounts involves significant assumptions regarding future traffic volumes, toll levels, and discount rates [289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk)[292](index=292&type=chunk) [Consolidated Statement of Profit or Loss](index=113&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In 2021, the Group's turnover increased by 23.8% to HKD 77.31 billion, gross profit grew by 29.1% to HKD 11.98 billion, and profit attributable to shareholders rose 13.1% to HKD 6.80 billion Consolidated Statement of Profit or Loss Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Turnover** | 77,309,614 | 62,458,009 | | **Gross Profit** | 11,982,743 | 9,284,159 | | **Profit Before Tax** | 9,385,178 | 8,244,476 | | **Profit for the Year** | 7,435,884 | 6,484,174 | | **Profit Attributable to Owners of the Company** | 6,800,879 | 6,015,368 | | **Basic Earnings Per Share (HK cents)** | 134.94 | 119.14 | [Consolidated Statement of Comprehensive Income](index=114&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) In 2021, the Group recorded a profit for the year of HKD 7.44 billion, with other comprehensive income of HKD 2.44 billion primarily from exchange differences, resulting in a total comprehensive income of HKD 9.96 billion Consolidated Statement of Comprehensive Income Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Profit for the Year** | 7,435,884 | 6,484,174 | | **Other Comprehensive Income (net of tax)** | 2,527,356 | 2,636,741 | | *Of which: Exchange differences arising from translation* | *2,436,320* | *2,605,314* | | **Total Comprehensive Income for the Year** | 9,963,240 | 9,120,915 | | **Total Comprehensive Income Attributable to Owners of the Company** | 9,327,246 | 8,597,603 | [Consolidated Statement of Financial Position](index=115&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2021, total assets grew to HKD 219.3 billion, total liabilities were HKD 153.1 billion, and shareholders' equity reached HKD 66.2 billion, with total borrowings at HKD 70.3 billion and a net gearing ratio of 69.4% Consolidated Statement of Financial Position Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Total Assets** | 219,284,425 | 186,811,307 | | *Non-current Assets* | 105,327,522 | 98,804,266 | | *Current Assets* | 113,956,903 | 88,007,041 | | **Total Liabilities** | 153,068,154 | 128,531,760 | | *Current Liabilities* | 92,922,448 | 79,939,492 | | *Non-current Liabilities* | 60,145,706 | 48,592,268 | | **Total Equity** | 66,216,271 | 58,279,547 | | **Equity Attributable to Owners of the Company** | 56,446,165 | 49,093,774 | [Consolidated Statement of Changes in Equity](index=117&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) In 2021, equity attributable to owners of the company increased from HKD 49.09 billion to HKD 56.45 billion, driven by profit and exchange reserve increases, alongside perpetual capital securities issuance, dividend payments, and share repurchases Changes in Equity Attributable to Owners of the Company (HKD thousands) | Item | Amount | | :--- | :--- | | **As at January 1, 2021** | 49,093,774 | | Total Comprehensive Income for the Year | 9,327,246 | | Equity-settled share-based payment | 44,540 | | Dividends paid | (1,964,670) | | Repurchase and cancellation of shares | (54,725) | | **As at December 31, 2021** | 56,446,165 | [Consolidated Statement of Cash Flows](index=119&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2021, net cash outflow from operating activities significantly narrowed to HKD 0.55 billion, net cash outflow from investing activities was HKD 4.94 billion, and net cash inflow from financing activities was HKD 6.96 billion, increasing year-end cash to HKD 24.34 billion Consolidated Statement of Cash Flows Summary (As of December 31) | Indicator (HKD thousands) | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash used in operating activities** | (551,492) | (4,531,608) | | **Net cash (used in)/from investing activities** | (4,937,629) | 324,540 | | **Net cash from financing activities** | 6,963,633 | 2,881,279 | | **Increase/(decrease) in cash and cash equivalents** | 1,474,512 | (1,325,789) | | **Cash and cash equivalents at beginning of year** | 22,411,689 | 22,600,362 | | **Effect of foreign exchange rate changes** | 453,670 | 1,137,116 | | **Cash and cash equivalents at end of year** | 24,339,871 | 22,411,689 | [Notes to the Consolidated Financial Statements](index=122&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations of accounting policies, estimates, and financial items, highlighting Mainland China as the largest revenue source, significant trade and other receivables, increased borrowings for expansion, and detailed related party transactions - Segment information indicates that Mainland China, Hong Kong, and Macau are the primary markets, contributing **52.4%**, **30.8%**, and **10.9%** respectively to the Group's turnover [73](index=73&type=chunk) - Total trade and other receivables amounted to **HKD 113.67 billion**, with the non-current portion being **HKD 54.43 billion**, primarily originating from Mainland China construction-related investment projects, expected to be gradually recovered from **2023 to 2031** [469](index=469&type=chunk)[470](index=470&type=chunk) - Total borrowings (including bank borrowings, guaranteed notes, and corporate bonds) amounted to **HKD 70.34 billion**, with RMB borrowings accounting for **81%** to hedge exchange rate risks of Mainland China operations [86](index=86&type=chunk)[495](index=495&type=chunk) [Five-Year Financial Summary](index=208&type=section&id=Five-Year%20Financial%20Summary) The five-year financial summary demonstrates the Group's continuous growth from 2017 to 2021, with turnover increasing from HKD 50.15 billion to HKD 77.31 billion, profit attributable to shareholders from HKD 5.49 billion to HKD 6.80 billion, and net assets from HKD 38.46 billion to HKD 66.22 billion Five-Year Financial Summary (2017-2021) | Indicator (HKD thousands) | 2017 | 2018 | 2019 | 2020 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Turnover** | 50,152,524 | 55,626,304 | 61,669,678 | 62,458,009 | 77,309,614 | | **Profit Attributable to Owners of the Company** | 5,490,091 | 4,500,148 | 5,413,208 | 6,015,368 | 6,800,879 | | **Total Assets** | 118,518,273 | 136,122,091 | 161,423,903 | 186,811,307 | 219,284,425 | | **Net Assets** | 38,462,911 | 43,078,250 | 50,907,565 | 58,279,547 | 66,216,271 | [Information on Major Investment Properties](index=210&type=section&id=Information%20on%20Major%20Investment%20Properties) This section lists the Group's major commercial investment properties in Macau, Mainland China (Zhuhai, Zhenjiang), and Hong Kong, all 100% owned, providing stable rental income - The Group's major investment properties are all for commercial use, located in prime areas of Hong Kong, Macau, and Mainland China, contributing rental income to the Group [547](index=547&type=chunk)

Financial Performance - The group's unaudited revenue for the three months ended March 31, 2022, was approximately HKD 17,325,929,000, compared to HKD 13,959,135,000 for the same period in 2021, representing a year-on-year increase of about 24.4%[4] - The unaudited operating profit for the same period was approximately HKD 2,904,704,000, up from HKD 2,406,654,000 in 2021, indicating a growth of around 20.7%[4] - The group reported a significant increase in both revenue and operating profit, reflecting strong operational performance in the first quarter of 2022[4][5] Contracts and Projects - The total new contracts signed by the group for the three months ended March 31, 2022, amounted to approximately HKD 45.01 billion[5] - As of March 31, 2022, the group's uncompleted contract amount was approximately HKD 285.68 billion[5] - Major new contracts included the Tseung Kwan O Chinese Medicine Hospital project with a contract value of approximately HKD 8.11 billion[6] - The group also secured a contract for the relocation housing project in Chuzhou, Anhui, valued at approximately HKD 1.51 billion[6] - The contract for the design and construction of the People's Hospital in Foshan, Guangdong, was approximately HKD 1.96 billion[6] Financial Data Disclaimer - The financial data provided is unaudited and should be considered for reference only, as it may differ from the audited financial statements[7] - The company emphasizes the importance of consulting professional advisors for any investment decisions based on this data[8]